Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EXECUTIVE SUMMARY:
- ITALY BUSINESS, CONSUMER SENTIMENT RISES AGAIN
- GERMAN EXPORTER, CONSUMER MOOD ALSO IMPROVES
- P.B.O.C. MAY FACE DIFFICULT BALANCE AS PRICES JUMP (MNI)
- ECB TAKES OVER SUPERVISION OF SYSTEMIC INVESTMENT FIRMS
Fig.1: Italian Confidence Continues To Rise
Source: Istat, MNI
NEWS:
PBOC (MNI EXCLUSIVE): The People's Bank of China should have room to tolerate a gradual rise in consumer inflation expected to result from a sustained rise in factory-gate prices, policy advisors told MNI, though they disagreed over whether the PBOC would be able to loosen policy in the second half of the year in order to revive weak domestic demand. For full article contact sales@marketnews.com
ECB (BBG): European Central Bank will supervise the largest and most systemic investment firms under new European Union legislation, which applies as of June 26, ECB says in statement. Systemic investment firms must ask for banking licence, become subject to banking supervision, ECB says in statement.
U.K. POLITICS (BBG): The U.K. government defended Health Secretary Matt Hancock after The Sun newspaper said he has been having an affair with a close aide.The newspaper published two photos of Hancock embracing Gina Coladangelo, apparently in his Whitehall office last month. The pair are friends from Oxford University and are both married with children. Hancock's office did not immediately return requests for comment from Bloomberg.Transport Secretary Grant Shapps, speaking to Times Radio as part of Friday's ministerial media round, said: "What somebody does in their private life is their private business. We're living in the 21st century."
JPMORGAN (BBG): JPMorgan Chase & Co. asked staff with client-facing roles or critical day-to-day functions in Hong Kong to get vaccinated against Covid-19 or subject themselves to testing every two weeks.The U.S. bank said such employees will need to get at least one vaccination dose by June 30, according to an internal memo from the lender's compliance department. Staff who haven't been vaccinated, for medical or other reasons, will need a test by that time and then share their vaccination or testing status every two weeks, the memo said. A spokeswoman for JPMorgan confirmed the contents of the memo.
GERMAN DATA: German exporter optimism rose further in June, as industry is benefiting from the global catch-up after the covid crisis, the Ifo institute noted Friday. Expectations rose to 26 in June, after rising to 22.5 in May, hitting the highest level since January 2011. Sentiment increased in almost all sectors except for the clothing industry where international sales are still forecast to decline. Following a dip last month, the automotive industry expects exports to pick up as well in June.
GERMAN DATA: German consumer confidence is set to improve further in July, pushing to the highest level since August 2020, Rolf Buerkl, a senior analyst at Gfk said Friday, as incidence rates decline sharply and vaccinations progress, both allowing for a further easing of restrictions. Sentiment is set to rise 6.6 points to -0.3 as both economic and income expectations increased sharply, a Gfk survey shows. Additionally, household's propensity-to-buy ratios ticked up again as well. "This makes a noticeable recovery in private consumption in the second half of 2021 more likely.", Buerkl's report noted, which could lead to a positive contribution to growth from the domestic economy.
DATA:
Italy Business Sentiment Up For 7-Mo Straight
- Jun SA manufacturing morale 114.8 vs May 110.9
- Jun composite business sentiment indicator 112.8 vs May 107.3
- Jun SA bus. sentiment rose for 7th consecutive month--Istat says
- Jun m/m intermed., capital, consumer gds all rose--Istat
- Manufacturing current orders +6.6 in Jun vs -0.2 in May
- 3-month manuf. output outlook +19.7 vs +14.8 in May
- Current manufacturing inventory levels -1.2 vs. May -1.8
Italy Consumer Sentiment Up Again in June
- Jun SA consumer confidence 115.1 vs May 110.6, beating market expectations (BBG: 112.0)
- Italy Jun consumer conf. index rose 3rd consecutive month--Istat
- Italy Jun consumer conf. index highest since Oct 2018--Istat
- Consumer's sentimento on the economy rose to 126.9 vs May 116.2
- Confidence in future outlook up to 125.5 from May 122.5
- Sentiment on their personal climate climbed to 111.1 vs May 108.7
- Sentiment on the current climate rose to 108.1 from May 102.6
FIXED INCOME: Drifting lower
Core fixed income markets have largely drifted lower this morning, but Bunds, gilts and Treasuries all remain comfortably above yesterday's intraday lows.
- There has only been tier 2 data this morning with UK consumer confidence data a bit soft but German consumer confidence data and Italian confidence data encouraging. There is some focus on the personal income/spending data from the US later today while we are also due to hear from the Fed's Kashkari, Mester, Rosengren and Williams.
- TY1 futures are down -0-0+ today at 132-04 with 10y UST yields down -0.4bp at 1.489% and 2y yields unch at 0.269%.
- Bund futures are down -0.18 today at 172.15 with 10y Bund yields up 1.0bp at -0.180% and Schatz yields down -0.2bp at -0.656%.
- Gilt futures are down -0.09 today at 127.77 with 10y yields up 1.1bp at 0.751% and 2y yields up 0.7bp at 0.071%.
FX SUMMARY- USD better offered
A more subdued session in FX and across assets as we close out the week.
- The Dollar trades in the red against all G10s on "risk on" as most Fed speakers suggest that Inflation will be temporary, and some move forward on US infrastructure plan.
- The Pound is the only currency down since the BoE yesterday.
- The Kiwi leads gains, up 0.21% versus the USD, while the GBP trades at -0.09%.
- EUR is also mixed and widely range bound, and also leading against the GBP, up 0.19%.
- EURGBP has again tested trendline circa 0.8592, traded 0.85944 high.
- Some market participants will look at 0.8602 June 21st high next.
- But initial upside target is still at 0.8624, the 100d MA, not broken since 11th January.
- USD tested session low versus JPY, EUR, CNY, CAD, AUD, SEK, NOK, PHP, SGD, but well within past ranges.
- Looking ahead, focus will turn the US PCE deflator, US Personal spending/income, and final Michigan.
- Speakers, include ECB de Cos, US Fed Kashkari, Mester, Rosengren and Williams.
EQUITIES: US Futures Up, But Just Off All-Time Highs
- Asian stocks closed higher, with Japan's NIKKEI up 190.95 pts or +0.66% at 29066.18 and the TOPIX up 15.55 pts or +0.8% at 1962.65. China's SHANGHAI closed up 40.908 pts or +1.15% at 3607.562 and the HANG SENG ended 405.76 pts higher or +1.4% at 29288.22.
- European equities are mostly lower, with the German Dax down 33.11 pts or -0.21% at 15574.62, FTSE 100 up 10.98 pts or +0.15% at 7127.03, CAC 40 down 11.77 pts or -0.18% at 6635.38 and Euro Stoxx 50 down 8.3 pts or -0.2% at 4120.78.
- U.S. futures are a bit higher, with the Dow Jones mini up 80 pts or +0.23% at 34164, S&P 500 mini up 3 pts or +0.07% at 4259, NASDAQ mini up 16.25 pts or +0.11% at 14370.5.
COMMODITIES: Precious Metals Higher With Dollar A Little Softer
- WTI Crude up $0.05 or +0.07% at $73.41
- Natural Gas up $0.02 or +0.53% at $3.422
- Gold spot up $7.9 or +0.45% at $1781.96
- Copper up $1.4 or +0.33% at $430.65
- Silver up $0.27 or +1.04% at $26.188
- Platinum up $9.18 or +0.84% at $1107.14
LOOK AHEAD:
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.